Hi,

Could you please help me answer the questions below? I need the correct answer, and if possible, a brief explanation. Thanks very much :))

1.Key factors for exchange rate determination are generally thought to be driven by _______ in the short run, but that _______ determines long run exchange rates.

a)combination of asset markets; interest rates and expectations; PPP

b)PPP; Fisher effect

c)Fisher effect; PPP

d)Fisher effect; combination of asset markets; interest rates and expectations

2.______ asserts that nominal interest rates in a county are equal to the required rate of return plus (+) compensation for expected inflation.

a)Absolute PPP

b)Relative PPP

c)The fisher effect

d)The law of one price

3.The current U.S. dollar- yen spot rate is 109 yen/ $. If the 360 day forward exchange rate is 111 yen/ $, then the yen is selling at a per annum _______ of ______.

a)premium; 180%

b)discount; 183%

c)premium; 183%

d)discount; 180%